AGREEMENT
BETWEEN COLUMBIA ACORN TRUST
AND COLUMBIA MANAGEMENT GROUP, INC.
THIS AGREEMENT ("Agreement"), is hereby made on February 28, 2005,
effective as of October 1, 2004 by and between Columbia Acorn Trust, a business
trust organized and existing under the laws of the Commonwealth of Massachusetts
(hereinafter called the "Fund"), and Columbia Management Group, Inc., a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts (hereinafter called "CMG"), on behalf of Columbia Funds
Distributor, Inc. ("CFD"), Columbia Funds Services, Inc. ("CFS"), Columbia
Xxxxxx Asset Management, L.P. ("CWAM") and Columbia Management Associates, Inc.
("CMA"). CFD, CFS, CWAM and CMA are subsidiaries of CMG and are collectively
referred to herein as the "Service Providers."
WITNESSETH:
WHEREAS, CFD acts as the Fund's underwriter pursuant to that certain
Amended and Restated Underwriting Agreement dated October 1, 2004 between CFD
and the Fund;
WHEREAS, CFS acts as the Fund's transfer agent pursuant to that certain
Shareholders' Servicing and Transfer Agent Agreement dated September 29, 2000,
as amended, between CFS and the Fund;
WHEREAS, CWAM acts as the Fund's investment adviser pursuant to that
certain Amended and Restated Investment Advisory Agreement dated August 1, 2004
between CWAM and the Fund; and
WHEREAS, CMA acts as sub-administrator for the Fund pursuant to that
certain Sub-administration Agreement dated August 19, 2004 and effective
September 29, 2000 between CMA and CWAM;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
CMG agrees to cooperate fully with any and all efforts by the Fund, its
Chief Compliance Officer ("CCO") and its board of trustees to provide assurance
that it has implemented effective compliance policies and procedures, as
applicable to each Service Provider, administered by competent personnel. In
providing such assurance, CMG or the respective Service Provider agrees to:
1) hold periodic meetings between CMG compliance personnel or its senior
management and the Fund's CCO, and designate a liaison at each Service
Provider for the CCO;
2) provide the Fund with periodic and special reports by regulatory
bodies, consultants, and external as well as internal auditors
relating to CMG's and/or the Service Providers' compliance with
applicable law and regulations, including reports by any entity
appointed to review compliance policies and
procedures by virtue of any order entered by the Securities and
Exchange Commission;
3) provide periodic reports of all preferred selling agreements and any
other selling agreements, formal or informal, executed by CFD that
contain terms different from those set forth in Exhibit A to the
Amended and Restated Underwriting Agreement dated October 1, 2004;
4) provide periodic reports of all material violations of CMG's or the
Service Providers' policies and procedures, including, but not limited
to, those governing money laundering, sales practices, frequent
trading and late trading;
5) provide a full description of any waiver granted by CFS from the
frequent trading prohibitions imposed by the Fund;
6) provide reports concerning CFD's actions to suspend or limit the
privileges of any entity with whom it has executed a Selling
Agreement, and on-going efforts to secure execution of appropriate
certifications or revised Selling Agreements that ensure sales in
conformity with the Fund's prospectus limitations;
7) inform the CCO promptly of the decisions of any committee or business
unit responsible for accepting new broker-dealers;
8) provide the CCO with prompt notice of material changes in the Service
Providers, including, for example, all policies and procedures and
compliance alerts;
9) provide prompt reporting of any investor complaint regarding the Fund,
including complaints about the distribution, marketing, operation or
management of the Fund, or any complaint arising from the purchase or
redemption of Fund shares.
10) provide periodic reports from CFS: (a) reflecting its monitoring for
and investigation of instances of possible frequent or late trading in
the Fund's shares; (b) regarding the imposition of required redemption
fees; (c) regarding CFS' efforts to implement appropriate internal
controls such as aging and escalation procedures, to ensure timely
management review and oversight of its policies and procedures;
11) provide periodic reports from CWAM or CMG with respect to soft dollar
arrangements and fair valuation of portfolio securities;
12) provide periodic reports from CWAM or CMG regarding stale prices of
securities or fair valuation methodologies for foreign securities; and
13) provide reports of any use by CWAM of synthetic investment techniques
or derivatives to ensure appropriate disclosure and management
controls over their use;
14) hire, train and maintain sufficient compliance staff to implement
effectively CMG's policies and procedures, and to provide the CCO with
information about CMG's staffing efforts.
In the event that the Trust determines that CMG or any of the Service
Providers has materially breached the terms of this Agreement, the Trust may in
its discretion suspend any and all payments to a Service Provider under the
terms of the applicable agreement between the Trust and the Service Provider
(such agreements listed on Appendix A hereto) if such material breach is not
cured promptly following written notice to CMG or any of the Service Providers
of such material breach. If CMG or a Service Provider fails to or refuses to
cure such material breach promptly after receiving notice of such material
breach, and if the Trust otherwise determines to terminate the applicable
agreement between the Trust and the Service Provider in accordance with the
terms of that agreement, CMG or the Service Provider will pay all fees and
expenses incurred by the Trust and its board in connection with finding a
replacement Service Provider for the Trust.
Nothing contained herein shall be deemed to amend, modify or in any way
alter the terms of each of the respective agreements between the Trust and the
Service Providers.
COLUMBIA MANAGEMENT GROUP, INC.,
on behalf of each of Columbia Funds Distributor, Inc.,
Columbia Funds Services, Inc.,
Columbia Xxxxxx Asset Management, L.P., and
Columbia Management Associates, Inc.
By: /s/ Xxxxx Xxxxxx
-------------------------------------------------
Xxxxx Xxxxxx
Chief Operating Officer
COLUMBIA ACORN TRUST
By: /s/ Xxxxx X. Xxxxx
------------------------------------------------
Xxxxx X. Xxxxx
Vice President, Treasurer and Secretary
Appendix A
Amended and Restated Investment Advisory Agreement between Columbia Acorn Trust
and Columbia Xxxxxx Asset Management, L.P. dated August 1, 2004
Amended and Restated Administration Agreement between Columbia Acorn Trust (on
behalf of Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA,
Columbia Acorn Select, Columbia Acorn International Select and Columbia
Thermostat Fund) and Columbia Xxxxxx Asset Management, L.P. dated August 1, 2004
Amended and Restated Underwriting Agreement between Columbia Acorn Trust and
Columbia Funds Distributor, Inc. dated October 1, 2004
Shareholders' Servicing and Transfer Agency Agreement between Liberty Acorn
Trust [now named Columbia Acorn Trust] and Liberty Funds Services, Inc. [now
named Columbia Funds Services, Inc.], dated September 29, 2000 and the
amendments thereto
